The defeat of casino gambling in the House Wednesday will make budget negotiations between the House and Senate much more difficult, several key lawmakers say.

"The budget was always going to be tough," said Senate Bill 152's prime sponsor and Senate Finance Committee member Sen. Lou D'Allesandro, D-Manchester, "but now it is going to be really tough."

Gov. Maggie Hassan included $80 million in her proposed budget from licensing fees from a casino. The House did not include the money in its budget and the Senate, which is currently crafting its version of the two-year operating plan, has not included the money either, but would have if the House had passed the bill.

Senate President Peter Bragdon, R-Milford, said: "We weren't planning to put (the money) in the budget and that still stands."

He said the Senate budget will not include any tax or fee increases and he does not foresee any other revenue sources being considered.

"We look to live within our means and we will live with that," Bragdon said.

Hassan lobbied House members for SB 152 leading up to the vote, including giving a 15-minute speech in Wednesday's Democratic caucus before the House session.

After the vote she said she was disappointed the House did not listen to the people of the state who support casino gambling but would continue to work with both the Senate and House and with both parties to find a way to fund her budget priorities.

"I remain committed to working with the legislature to finalize a balanced budget that restores the priorities that the people of New Hampshire support: job creation, higher education, economic development, strengthening our mental health system and protecting the health and well-being of our communities," Hassan said.

Restoring funding

House Speaker Terie Norelli, D-Portsmouth, said after the vote that while the House and governor disagree on SB 152, they do agree on the need to restore funding for "investments slashed in the O'Brien budget."

The Senate is discussing heavy-handed cuts to the responsible budget the House sent them, Norelli said.

Norelli was not alone in saying money is needed to restore spending slashed in the last two-year budget developed by the Republican-controlled House and Senate.

"We knew we needed the money for the budget; now it's up to the House to make up the difference," said D'Allesandro. "My prediction is it's going to be a long budget process now."

Taxes rejected

On Tuesday, Senate Finance Committee Chairman and SB 152 sponsor Sen. Chuck Morse, R-Salem, released a list of potential reductions from House-adopted spending on Medicaid expansion, community health centers, the developmentally disabled wait-list for services and in the mental health system, among others.

The Senate Tuesday rejected about $53 million in House-approved tax increases by a 4-2 vote down party lines. The committee rejected a 20-cent-a-pack increase in the tobacco tax, which would produce $40 million during the biennium and a two-year delay in business tax credits that would save the state $13 million.

By the same vote, the committee rejected a 12-cent increase in the gasoline tax over three years that was included in the House-passed budget and a tax on tips earned by restaurant and other hospitality employees.

The $80 million in revenue from a casino would have allowed the Senate to restore money they had planned to cut.

Bragdon noted the Senate would have made some adjustments in its proposed budget if the bill had passed, but noted the Senate had already agreed to the House level of funding for the University System of New Hampshire and the New Hampshire Community College System and a number of other programs.

The Senate is expected to finalize its budget plan next and then vote on it June 6.

Then House and Senate negotiators will try to reach a compromise on the operating budget before the next fiscal year begins July 1.